Welcome to another recap of Equity, TechCrunch’s flagship podcast about the business of startups. Today’s episode is all about M&A, how one YouTuber found success in the creator economy, why Twitch is still losing money, and a self-driving car company making a comeback.
First, senior reporter Rebecca Beran covers fintech giant Stripe’s acquisition of four-year-old competitor Lemon Squeegee. Stripe CEO Patrick Collison said the acquisition strengthens Stripe’s ability to calculate and pay global sales taxes for its customers. Terms of the deal were not disclosed. It’s worth noting that Lemon Squeezy is famous for turning down other investments, including a $50 million Series A. The company’s founders said they were looking for the right partner to take the business to the next level, and apparently Stripe was it.
This comment led Rebecca to consider the idea of M&A as an exit strategy. Is this practice creating a false incentive in venture capital, where investors are becoming more risk-averse and seeking more reliable paths to getting their capital back at the expense of competition in the long term? Other startups are turning down such opportunities and going it alone. Look at Wiz’s decision not to be acquired by Google for $23 billion, which we discussed on last Friday’s episode.
Rebecca then mentioned Matt Pat, the first big YouTuber to successfully exit his company, Theorist Media. Matthew Patrick has turned his successful video series The Game Theorists into a full-fledged media business called Theorist, which has 40 million subscribers across its channels. But he was tired of the constant content being uploaded and found a way to convince investors that the business could continue without him. He is currently on Capitol Hill educating politicians about what it takes for creators to succeed as small businesses.
Speaking of creators and acquisitions, Rebecca pulled out a report from the Wall Street Journal that revealed how Twitch is still losing money to Amazon after 10 years. Amazon acquired Twitch in 2014 for $1 billion, but the company remains unprofitable. And will it ever happen? Twitch generated approximately $667 million in advertising revenue and $1.3 billion in commerce revenue in 2023, which was less than 0.5% of Amazon’s total 2023 revenue. Amazon defended the deal, saying Twitch has a path to long-term profitability. But a widespread trend that seems to favor short-form videos over watching someone play an entire video game live argues otherwise.
Finally, while we’re on the topic of comebacks, self-driving delivery startup Nuro is gearing up for a comeback of its own. Nuro has been quiet over the past year after two major layoffs. Once a darling of the AV industry, having raised more than $2 billion in funding from prominent investors, Nuro was rapidly burning through capital as it sought to scale and commercialize quickly. This time, the company is back with better AI and a new vehicle, the R3. R3 will be tested in the Bay Area and Houston later this year.
Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo and posted every Monday, Wednesday, and Friday.
Subscribe on Apple Podcasts, Overcast, Spotify, and all casts. You can also follow stocks × and threads (@EquityPod). For full episode transcripts, if you prefer reading to listening, check out the full episode archive on Simplecast.
